Iceland

Some Irish monks may have reached Iceland before AD 800, but it remained largely unsettled until about 870. Norwegian Viking Ingólfr Arnarson is traditionally considered the first permanent settler; he established his farm at Reykjavík, now the capital. During the next 60 years, other settlers flocked to the island from the Scandinavian countries and the British Isles. In 930 a central organization for the whole island was superimposed on the already existent regional polities in the form of a general legislature called the Althing. Headless State The commonwealth founded by the Icelanders was a republic without executive authority or any head of state. Legislative and judicial powers were wielded by the Althing, but enforcement was the responsibility of the aggrieved party, sometimes assisted by a powerful chieftain. Nevertheless, the state prospered for more than 300 years. The land had ample resources of fish, seal, and fowl, and grazing lands were extensive. Icelandic traders were active in Scandinavia, the continental European countries, and the British Isles, and culture flourished in a golden age that produced the great body of medieval Icelandic literature. Late in the 10th century Icelanders colonized Greenland, and early in the 11th century, according to one tradition, Leif Ericson, the Icelandic explorer, reached the mainland of North America (Vinland), although attempts at settlement there were frustrated. Icelanders accepted Christianity by arbitration in 1000, and the church gradually destabilized secular authority. For one thing, it undermined the old political order, in which the pagan priests served as secular chieftains. Furthermore, the church sought foreign support in its struggle with secular powers. Iceland was under the archbishopric of Nidaros (now Trondheim), Norway, and King Håkon IV of Norway, aided by the internal squabbles of Icelandic politicians, ruthlessly exploited the situation. In 1262-1264 his ambition was fulfilled when Icelanders recognized him as their king. Decline Foreign domination brought with it a long decline of Icelandic fortunes. This was especially true after the country, along with Norway, passed to the Danish crown in 1380. As Denmark sought to expand its shipping and commerce, it did not want the lucrative Icelandic trade to flow to England or Germany, the two countries that had the greatest interest in the island. Gradually, the Danish managed to reduce the trading activities of these nations in Iceland, and by the middle of the 16th century they had virtually ceased. At the same time, the royal authority greatly increased its interference in other spheres of Icelandic life. In 1550 Lutheranism was forced on the nation, a feat crowned with the execution without trial of the last Roman Catholic bishop, Jón Arason, and two of his sons. Half a century later, in 1602, a trade monopoly was instituted. From that time until 1787, commerce with Iceland was permitted only to licensed merchants, who would buy their charters from the Crown for exorbitant fees with the knowledge that they could recoup their investment manifold from their captive customers. Consequently, prices for necessities, such as grains, lumber, and metal goods, soared, while Icelandic products-mostly fish and wool-were undervalued because their prices were established by the same merchants. In the long run, this system of economic oppression reduced the nation to utter destitution. Autocracy In 1660 King Frederick III of Denmark assumed autocratic powers in his homeland, and two years later Icelandic leaders were forced, under threat of arms, to accept the absolute monarchy in Iceland. The abrogation of the Althing's legislative powers, as well as the denial of its judicial role, quickly followed. The country now stood stripped of all political power. During the 18th century, Icelanders reached the lowest point of their national existence. At the end of the Age of Settlement, in 930, some 60,000 to 90,000 people are estimated to have lived in the country; in the early years of the 18th century, when the first national census was taken, the population was down to 50,000. A series of disasters, including a smallpox epidemic in 1707-1709, famines in the middle of the century, and the eruption of the volcano Laki in 1783, further reduced the nation to some 35,000 inhabitants, most of them paupers; Denmark seriously considered evacuating all the remaining Icelanders to the heathlands of the Jutland Peninsula. Turning Point In the 18th century, however, national fortunes reached a turning point. Shortly after the middle of the century an enterprising Icelandic official established some cottage industries in Reykjavík, then a mere collection of huts. Although his effort eventually failed, it provided inspiration for other attempts that improved conditions in the country. The first tangible sign of this was the modification of the trade monopoly in 1787, allowing commerce with any Danish subject. Although the 19th century began with the total suspension of the Althing, it eventually became an age of reawakening. The waves of revolution on the European continent brought about the end of absolutism in Denmark, and soon the Icelanders began to clamor for their national rights. In this struggle they were led by the scholar-politician Jón Sigurdsson, now revered as a national hero. The Althing was reconvened in 1843; trade was made free to all nations in 1854; and 20 years later a new constitution was promulgated, granting the Althing partial control over domestic finances. Rapid Progress Until this time, the Icelandic economy had remained practically medieval, but with financial authority established inside the country, it began to progress at a relatively fast pace. At the same time the struggle for independence continued; in 1904 Iceland attained home rule, and in 1918 Denmark finally recognized it as an independent kingdom. For the next 25 years, however, under the Treaty of Union, it was bound to Denmark in a personal union under Christian X. During this time, until World War II, great economic strides were made, despite the lean years of the Great Depression. When Denmark was occupied by Nazi Germany in April 1940, Iceland was cut off from its head of state. A month later, it, too, was occupied, but by British troops. In May 1941 the Icelandic government appointed Sveinn Björnsson, a former minister to Denmark, as regent. The Treaty of Union ran out in 1943, and by early 1944, given that Denmark was still occupied, Icelanders decided to act unilaterally to terminate it. In a national referendum, with 98.6 percent of eligible voters participating, 97.3 percent voted to sever all ties with Denmark, and 95 percent chose a republic. The Icelandic republic was accordingly proclaimed at Thingvellir on June 17, 1944, with Sveinn Björnsson as the first president. Free but Occupied Paradoxically, Iceland celebrated its final deliverance from alien rule while still occupied by another foreign power. In 1941 the Icelandic government had been pressed by Britain and the United States to ask for U.S. protection, primarily to free the British occupation troops for service elsewhere. Contrary to contractual obligations, however, the United States did not withdraw its forces at the end of the war, instead requesting permanent military bases in the country. These were refused. A compromise agreement was made in 1946, permitting the United States control of the Keflavík airport for six and a half years. Before that pact expired, Iceland became a founding member of the North Atlantic Treaty Organization (NATO), and in 1951, during the Korean War, the United States again obtained Icelandic permission to station troops in the country, this time under a NATO umbrella. This U.S. presence, uninterrupted since 1941, has been profoundly divisive for more than a generation; Icelanders, while overwhelmingly sympathetic to the Western democracies, are still evenly split on the issue. In 1985 the Althing unanimously passed a resolution that banned the entry of nuclear weapons into Iceland. A second, perhaps more fundamental, question of national existence since World War II involved another Western democracy, Britain. In 1958 Iceland decided to extend its fisheries jurisdiction from 4 to 12 mi; the British responded by sending warships to protect their trawlers in Icelandic waters. The so-called Cod War that resulted lasted until 1961, but it was renewed with every extension of Icelandic jurisdiction over adjacent waters-to 50 mi in 1972 and 200 mi in 1975. It was not until 1977 that Icelanders finally became the undisputed masters of their most vital resources. The intractable problem of inflation remained; during 1980-1988 it averaged 38 percent annually, and no government was able to break the upward spiral. By 1990 inflation was somewhat lower at 16 percent. Even so, Icelanders enjoy a standard of living among the highest in the modern world. Icelandic politics have generally been dominated by coalition governments, a situation that continues in the 1990s.  Iceland's president, Vigdís Finnbogadóttir, the world's first popularly elected female head of state, was first elected in the 1980s. She began her fourth term of office in 1992.